For pathology, the Jan. 1 start of the 2005 Medicare physician fee schedule
offers many welcome changes. But along with these changes comes one that
is not so welcome in the area of flow cytometry services.

CAP advocacy to change and re-value codes for immunohistochemistry and
in situ hybridization (Related article: Chapter
and verse on next year’s CPT code changes, December 2004) increased
the professional component work relative value units for the new and revised
services by 26 percent to 51 percent. The final rule also made use of
College-gathered data to update independent laboratory technical component
practice expenses, a decision that boosted overall pathology payments
two percentage points above a scheduled 1.5 percent increase and independent
laboratory payments six percentage points above that mark.

In accepting the CAP data, the Centers for Medicare and Medicaid Services
ended a two-year moratorium on a change in how it calculates pathology
practice expense values. The agency granted the moratorium in 2003 and
extended it through 2004 to allow the College to collect the independent
laboratory practice expense data. Without the moratorium, Medicare would
have cut physician fee schedule payments to hospital-based pathologists
by two percent and to independent laboratories by eight percent.

The minimum 1.5 percent increases in 2004 and this year resulted from
strong advocacy by the College and numerous other physician groups during
congressional consideration of the 2003 Medicare prescription drug law.
Without the 1.5 percent floor, the statutory formula for establishing
the 2005 conversion factor—the sustainable growth rate—would
have produced a 3.3 percent cut.

Flow cytometry

The positive news for overall pathology payments is tempered by reductions
to professional and technical flow cytometry services. These reductions
stem from an August 2003 proposed rule for the 2004 fee schedule in which
the CMS, noting its concern about overpayments for flow cytometry services,
proposed changing coding and payment for the professional component of
flow cytometry to a single interpretation per panel. The CMS also expressed
concern about duplicative payment for multiple markers for the technical
component of flow cytometry.

In the 2003 proposed rule, the agency declared that in cases where flow
cytometry is used to diagnose lymphoma or leukemia, there is not an interpretation
for each individual marker and that "there is a single interpretation
based on the quantification of all markers tested." Further, the CMS said
the system of allowing flow cytometry payment on a per-marker basis "may
encourage the performance of more markers than may be medically necessary
because the pathologist determines what markers to perform and when to
perform them." Instead, the agency said the markers might be paid more
appropriately on a per-panel basis.

The College objected to the proposed changes and suggested that the CMS
work with the CAP, through the CPT and AMA/ Specialty Society Relative
Value Update Committee processes, on flow cytometry coding and payment.
The CMS agreed in its final rule for 2004 to let the College bring coding
proposals forward. This decision ultimately mitigated reductions that
would have occurred had the CMS moved forward with per-panel payments
based on January 2004 published values.

To recognize the greater interpretive challenge that arises from clinical
cases that involve multiple markers, the College’s CPT proposal called
for splitting the first marker from additional markers. The goal was to
maintain recognition of flow cytometry’s complexity while also answering
the CMS’ concerns about overpayments, and to do that through a Relative
Value Update Committee re-evaluation of work relative value units, or
RVUs. However, the CMS objected to the College’s proposal to the CPT editorial
panel, and CPT eventually adopted the revised, three-tier interpretation
panel approach the CMS suggested. While not endorsing the tiered coding
approach, the College worked through the AMA Relative Value Update Committee
process to collect physician work data to value the new codes.

The College was faced with the difficult choice of working within the
existing process to lessen a negative consequence or not participating
and leaving the decision entirely to the government. The CMS values for
flow services are based on survey data the College provided. Although
the values for the services are reduced—in some cases significantly,
as compared with the per-marker approach—the CAP believes the outcome
is better than what the CMS proposed originally.

Surgical pathology

As a result of significant College-proposed changes to coding for immunohistochemistry
and in situ hybridization services, the CAP worked through the Relative
Value Update Committee process to collect data to re-value these services.
As such, work relative value units in the 2005 fee schedule will see increases
for these new and revised codes compared with the codes previously available
for the services. Specifically, work value increases are 26 percent for
revised code 88361, computer-assisted quantitative or semi-quantitative
IHC; 29 percent for new code 88360, manual quantitative or semi-quantitative
IHC; 29 percent for revised code 88365, qualitative ISH; 40 percent for
new code 88367, computer-assisted quantitative or semi-quantitative ISH;
and 51 percent for 88368, a new code for manual quantitative or semi-quantitative
ISH.

The role of the RUC process in establishing Medicare payment

In 1992, Medicare established a standardized physician payment schedule
based on the resource-based relative value scale, or RBRVS, which determines
payments for services based on the resource costs needed to provide them.
These costs are divided into three components: the physician work RVUs,
physician practice expense RVUs, and the professional liability insurance
RVUs. Each receives a geographic practice cost adjustment. Total payment
for a service is calculated by multiplying the combined costs by an annually
adjusted conversion factor.

On average, the physician work component accounts for 55 percent of the
total relative value for each service. While the values originally were
set by a Harvard University study, the physician work RVUs now are updated
based on the work of the Relative Value Update Committee, which was established
in 1991 to make recommendations to the CMS on RVUs for new and revised
codes. Historically, the CMS has accepted 95 percent of the committee’s
recommendations. The College has held a seat on the committee since its
inception, along with 25 other medical specialties.

As with the new and revised codes for flow cytometry, in situ hybridization,
and immunohistochemistry, the College had the opportunity to conduct eight
physician work surveys for the committee’s consideration. In conducting
the eight physician work surveys, the College sought participation from
a wide variety of pathologists who performed the various services, and
it received the necessary responses to bring forward the data for the
committee’s consideration this past fall. These results were then presented
to the committee by a team of pathologists, each with expertise in the
areas under consideration.

The Relative Value Update Committee’s surveys are designed to capture
the amount of physician work it takes to perform the service. This consists
of the technical skill with respect to knowledge, training, and experience
necessary to perform the service; the required mental effort and judgment
as well as physical effort; and stress due to the potential risk to the
patient. The survey provides a way to compare these aspects of physician
work in the new or revised code to the work of an established code on
the physician fee schedule.

Laboratory, bone marrow issues also included in 2005 final rule

Diabetes screening tests. The proposed and final 2005 Medicare
physician fee schedule rule was also used as a vehicle to implement provisions
in the Medicare Modernization Act. This 2003 law mandates coverage of
diabetes screening tests, and in the proposed 2005 physician fee schedule,
the CMS said it will pay for the screening diabetes tests at the same
amounts paid for these tests when performed to diagnose a person with
signs and symptoms of diabetes. Medicare will pay for these tests under
the clinical laboratory fee schedule, using CPT code 82947 Glucose; quantitative,
blood (except reagent strip) and CPT code 82951 Glucose; tolerance test
(GTT), three specimens (includes glucose). To indicate that the purpose
of the test is for diabetes screening, CMS proposed V77.1 Special screening
for diabetes mellitus as the applicable ICD-9-CM code for this purpose.

In comments to the proposed physician fee schedule, the CAP asked that
the CMS include CPT code 82950, Glucose; post glucose dose (includes glucose),
among the diabetes screening test codes it proposed as eligible for payment
under new screening benefits, in addition to CPT codes 82947 and 82951.
But, the College said, 82950 "is used much more frequently as a screening
test than the GTT, which is more of a definitive test usually requested
when questionable results from random, fasting or post-glucose dose or
postprandial glucose levels are obtained."

In the final rule, the CMS corrects the unintentional omission of CPT
code 82950, post glucose dose (includes glucose), as a diabetes screening
test. The agency provides assurance that there will be clear guidance
on covered services for providers and beneficiaries by way of two publications:
"The Dear Doctor Package," which includes the 2005 Fact Sheet, and "Medicare
Coverage of Diabetes Services and Supplies."

Cardiovascular screening blood tests. The Medicare Modernization
Act also provides for Medicare coverage of cardiovascular screening blood
tests for the early detection of cardiovascular disease or abnormalities
associated with an elevated risk for cardiovascular disease. The CMS proposed
to pay for the screening cardiovascular disease tests at the same amounts
paid for these tests when they are performed to diagnose a person with
signs and symptoms of cardiovascular disease. Medicare would pay for the
tests under the clinical laboratory fee schedule. The CMS proposed to
use the following CPT codes: 82465 Cholesterol, serum or whole blood,
total; 83718 Lipoprotein, direct measurement; high density cholesterol
(HDL cholesterol); 84478 Triglycerides and 80061 Lipid Panel.

The CMS proposed to allow coverage of other types of tests under this
new screening benefit if it determined this was appropriate through a
National Coverage Determination. In the final rule, the CMS finalized
its proposed changes. The agency also announced its plan to include the
special cardiovascular screening V codes for ischemic heart disease (V81.0),
hypertension (V81.1), and other unspecified cardiovascular conditions
(V81.2) in the Laboratory Edit Module and to release instructions and
information to smooth the transition for the new benefit. Providers who
routinely give advance beneficiary notices to beneficiaries must include
in the ABN that the frequency limitation is the reason for which Medicare
will deny coverage. A patient who has an ABN and exceeds the frequency
limitation may incur out-of-pocket charges.

Bone marrow aspiration and biopsy through the same incision on the
same date of service. In its proposed rule for the 2005 fee schedule,
the CMS proposed creating a G-code for a bone marrow aspiration and biopsy
done through the same incision on the same date of service. The agency
argued there is minimal incremental work associated with performing the
second procedure through the same incision during a single encounter and
proposed an add-on G-code to reflect five minutes of additional physician
work and practice expense. The CAP commented that the CMS should increase
to 15 minutes the amount of additional physician work required when performing
a bone marrow aspiration together with a bone marrow biopsy. The CMS disagreed
and made final its proposal for an additional five minutes of incremental
work. Physicians now must use the CPT code 38221 for bone marrow biopsy
and G0364 for the second procedure (bone marrow aspiration) when the aspiration
and biopsy are done through the same incision on the same date of service.
The use of this G code for the second procedure represents an additional
payment of $12.89 for performing this service in a non-facility setting,
and $9.85 when performed in a hospital or other facility setting.

Pam Johnson is CAP assistant director for professional affairs, Division
of Membership and Advocacy, Washington, DC.